Playtika Inches Closer to US IPO Valuing Company at $10 Billion

Posted on: October 18, 2020, 01:20h. 

Last updated on: October 18, 2020, 02:17h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Playtika Holding Corp., a provider of mobile games that was once controlled by Caesars Entertainment (NASDAQ:CZR), is moving closer to a US initial public offering (IPO). It filed related documents with the Securities and Exchange Commission (SEC) last week.

Playtika IPO
Playtika’s Israel headquarters. The mobile gaming company is nearing an IPO. (Image: Haaretz)

The gaming company’s filing is confidential, but Reuters reports the operator confirmed the plans to the news agency. Reports surfaced in June that Israel-based Playtika is eyeing a $1 billion IPO that values the company at $10 billion. The company is backed by Chinese investors, including Yunfeng Capital, a private equity group started by Alibaba founder Jack Ma, one of Asia’s richest men.

The ties to China could add an element of controversy at a time of heightened tensions between the world’s two largest economies.

Playtika’s move to go public comes at a time when a number of China-owned companies are looking to reconsider their listings on US exchanges amid rising tensions between Washington and Beijing,” according to Reuters.

This year, domestic lawmakers are increasing scrutiny of many Chinese companies that list shares in the US, alleging the China-based firms capitalize on a playing field that isn’t level while claiming many are financially flimsy and potentially dangerous to investors.

Playtika Past, Future

Playtika is more than a decade old and was acquired by Caesars in 2011. But when the casino operator filed for Chapter 11 bankruptcy protection in 2015, it was faced with a cash crunch, forcing the sale of the mobile gaming firm a year later for $4.4 billion.

The online gaming company’s IPO effort is gaining steam at a time when markets are assigning lofty valuations to internet casino and social gaming companies. Looking to capitalize on that trend, Playtika could launch its share offering before the end of 2020 or early next year. Morgan Stanley is already on board as lead underwriter for the transaction.

The Israeli company controls the World Series of Poker (WSOP) social platform and offers games including Bingo Blitz, Caesars Slots, and Poker Heat, among others. The operator has north of 30 million monthly users, according to its website.

Going the Traditional Route

One interesting element regarding Playtika’s IPO plans is that the company is using the traditional avenue to becoming a publicly traded entity.

This year, markets are flush with deals involving special purpose acquisition companies (SPAC), and the gaming industry is among the most fertile territories for such transactions. SPACs, or blank-check firms, merge with other companies, enabling the target entity to go public in more rapid fashion than via a standard IPO.

A slew of blank-check companies announced plans to target iGaming and social gaming firms this year, and some deals in those spaces are pending. However, Playtika isn’t opting to partner with a SPAC.